GPT set to defend $100m class action

GPT Group
’s former chief, Nic Lyons, and present head of corporate development
Michael O’Brien
will be called to give evidence in a $100 million class action next week as the group becomes the second major property trust to defend its performance during the GFC.

The lawsuit, to begin next Wednesday in the Victorian Federal Court, has been launched by Slater & Gordon, the Melbourne legal firm behind the successful $200 million claim against Centro (now rebranded Federation Centres).

Last year GPT’s present chief,
Michael Cameron
, said the trust was insured against a successful action. Mr Cameron took over the helm in 2010 and will not be cross-examined.

Slater & Gordon has more than 500 disgruntled investors for its claim, which alleges the trust engaged in misleading and deceptive conduct and breached its continuous disclosure obligations between February 28 and July 6, 2008.

The firm’s central argument revolves around two failed asset sales in Australia and Europe and maintains these were the main factor behind a radical earnings downgrade in 2008 as well as a precipitous slide in the share price.

GPT ranked as one of the most notorious victims of the credit crunch, haemorrhaging more than $1 billion in value. But its fortunes have reversed dramatically since then, and it is now regarded as one of the strongest companies in the sector.

Slater & Gordon will cross-examine a number of credit agencies while GPT will call upon Mr Lyons and Mr O’Brien. The trust previously said it is actively defending the claim.

A spokesperson for the GPT Group said: “GPT maintains it acted appropriately in 2008 with respect to its disclosure requirements."